Households will be burdened with “tripled” green taxes to help pay for wind
farms and nuclear power while some factories escape the new costs, it has
emerged.

Consumer groups and charities said reforms introduced by Ed Davey, the Energy Secretary, under the Energy Bill will have “long lasting implications” for household bills, which are already more than £1,300 per household.

They also criticised “alarming” plans to make families pay towards the green costs of businesses that use a lot of energy - such as steel-making or other heavy industry.

Mr Davey said consumers' bills are the “greatest concern” but some energy-intensive companies could have to close down or go overseas without help to reduce their costs.

Under the reforms announced on Thursday, households and businesses will have to pay £7.6 billion a year towards the cost of building “greener” power stations by 2020. This is three times the current level of £2.35 billion per year,

The Energy Secretary insisted electricity bills will be around nine per cent – or £61 - lower than they would have without the changes because consumers will no longer be so exposed to soaring gas prices.

"The net effect of Government policy on energy bills is downwards not upwards,” he said.

The average dual fuel bill will go up by an estimated £178 a year by 2030 under all green energy policies, which the Government claims is lower than without its intervention. The contribution to paying for nuclear and renewables will make up £95 of the average bill within eight years.

There are no estimates for how much bills will rise to help out “energy intensive” factories or how many will be exempt but the Government will try to “minimise” the impact.

A number of charities, experts and businesses expressed concern about the costs of the reforms.

Peter Smith of the National Energy Action charity said the Government must re-think “alarming” proposals to make households pay the green energy costs of factories.

“'The Government's proposals will have clear and long lasting implications for domestic energy consumers,” he said.

“We are alarmed at the potential imposition of new and additional costs and, in particular, that low-income vulnerable consumers may end up picking up the tab for energy intensive users. This would be a clear contradiction of the principle that the polluter should pay.”

Guy Newey, head of environment and energy at Policy Exchange, claimed that “the subsidy lobby has won” and households will be hit with an “unnecessarily high level” of green costs.

Audrey Gallacher, Director of Energy at Consumer Focus, added that people need a guarantee that they are “getting value for money”, while recognising the benefits of getting greener energy.

“What customers will be most worried about is how this will increase their bills – so the Government must make clear how they will control costs to the consumer,” she said.

Energy companies largely welcomed the reforms giving them the subsidies they need to build nuclear power stations and wind farms. Energy UK, the industry group representing the Big Six energy companies, added it is now “essential” to have a “a focus on affordability for households and for businesses of all sizes, now and during these changes”.

Speaking in the House of Commons, Peter Lilley, a former Conservative Trade and Industry Secretary, questioned the Government's strategy at a time of rising fossil fuel prices.

He said the Government was "burdening British industry and households" with "tripled taxes" to pay for green measures.